Chocolate Prices Have Soared. A New Law Threatens to Keep Them High.

A European Union law that aims to make chocolate more sustainable has left farmers racing to map their plots

By Alexandra Wexler of The WSJ. Excerpts:

"a new European Union law that seeks to protect the world’s rainforests, which have shrunk dramatically in recent decades due to the expansion of land used to grow cash crops like cocoa, palm oil and coffee, or to herd cattle. Because the EU is the world’s largest chocolate market, importing more than half of the world’s cocoa beans, the law will also apply to global confection giants like U.S.-based Mars, the maker of M&M’s, or Switzerland-based Nestlé.

Starting from Dec. 30, chocolate makers that sell or produce in the EU will have to show that the cocoa they use wasn’t grown on land cut from forests since the end of 2020. In practice, it means that each morsel of cocoa that makes its way into the bloc will need to be linked to the GPS coordinates of the farm where it was harvested."

"Ivory Coast’s cocoa and coffee regulator says it has mapped just over 80% of the country’s estimated 1.55 million cocoa farms. That leaves some 300,000—or about 2,000 a day—to be mapped or otherwise accounted for by Oct. 1, the start of the new cocoa season."

"The EU initiative is part of a growing movement to make raw materials—including agricultural products and minerals used in smartphones and electric cars—traceable, with the goal of reducing the potential harm they inflict on the environment and local populations.

Ivory Coast was once covered in dense rainforest. But over the past 60 years, 90% of the country’s forest cover has disappeared, making it one of the countries with the highest annual rates of deforestation in the world over that period, according to the United Nations.

"In 2017, on the sidelines of a U.N. climate conference in Germany, the two governments signed a plan with some of the world’s largest cocoa and chocolate companies to halt the clearing of forests for cocoa production and restore areas that had already been degraded."

"“This regulation will have a cost,” said Michel Arrion, chief executive of the International Cocoa Organization, which represents 52 cocoa-importing and exporting countries. “There will be a lot of documentation and bureaucracy.”"

"Farmers have traditionally responded to cocoa shortages by clearing forests to make way for more farmland. That’s not an option under the new EU legislation. 

Failure to map all the farms in Ivory Coast and other cocoa-producing countries could take more beans out of the market, worsening the shortages."

"To increase their harvests now, farmers will have to invest more in things like fertilizer and pesticides, industry experts say. And instead of simply clearing new land for crops, farmers will have to use good agricultural practices like pruning and replacing aging trees with new seedlings. To motivate farmers to do that, industry experts say, cocoa prices need to remain higher for longer. 

“Nobody really expects the price to go down quickly anytime soon,” said Antonie Fountain, managing director of the Voice network, an association of civil society organizations working in sustainable cocoa based in the Netherlands. “The sector is finally at the point where we’re acknowledging that we need to pay more for sustainable cocoa.”"

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